Joint ventures are properly defined as a business agreement where the contracting parties agree to develop a new product and a new asset by sharing and pooling together equity. This means that they will be able to cooperate with regards to the policies and, conversely, share profits. Many successful products today are a result of joint ventures; a very good example here is Sony Ericsson, which has claimed a very significant portion of the telecommunications and technology market. Sony Ericsson, in fact, has been very beneficial to these companies, since their profits in the joint venture exceeded the ones they have when they were competing.
Joint ventures are also an attractive way to have an effective affiliate marketing program. The most obvious reason is the fact that both partners will have the capacity to take advantage of each other’s clout and consolidate your target niche. Having a larger audience is a very important aspect of affiliate marketing, since profits are determined through referrals and commissions. Paradoxically, this is most effective when you collaborate with those who directly compete with you in your target market. This allows each other to harness the particular strength of the other partner in your niche, preempting other competitors.
A good example here is affiliate marketing in the software industry. One firm may offer a software focusing on security and privacy,while the other focuses on low prices (i.e. freeware). Both firms can benefit from a good affiliate marketing campaign since their strengths complement each other. The freeware company gets revenues from advertising and is also positioning their product to the level of security and privacy that the other offers. On the other hand, the more expensive firm gets the publicity needed and may also benefit from a good public image, being a collaborator with other firms to ensure higher quality products.
Joint venture brokers are often necessary in order to make these deals work. They are people who look for interested and prospective partners and do the legwork in terms of marketing the joint enterprise. In exchange, the broker gets a predefined commission and other benefits that may result from a successful deal. Joint venture brokers should be able to balance out the interests of the companies concerned and the market to produce a win-win situation. It is also helpful if they have extensive social contacts, particularly with other brokers, to find a double coincidence of want.
In affiliate marketing, joint venture brokers will be able to help you by analyzing your current positioning in the niche and look for other services which can complement or add value to your current product or service. This also has the advantage of being able to tap previously foreign segments of the market niche, particularly in the international scene. In the web, people promoting goods and services often pair up with those which deliver a large audience base to make a more effective and valuable marketing campaign. Joint ventures in affiliate marketing are definitely the way to go. And a good JV Broker can make the difference in your success.